Unexpected Turn: Wildfire and Catastrophic Events Impacting Insurance

Join us for a crucial discussion about how wildfires and other catastrophic events are reshaping the

insurance industry landscape.

Discussion Points:

• Insurance Carrier Rate Filings: Major insurers like State Farm, Allstate, and Liberty Mutual requesting 20-40% premium increases in

California, citing catastrophic losses averaging $15 billion annually since 2020.

• Regulatory Constraints: California’s unique regulations prevent insurance companies from maintaining catastrophic reserves, forcing

reliance on costly reinsurance with premiums up 300% in the past year.

• Market Pause: 17 leading carriers have suspended writing new homeowner policies in California, impacting approximately 40% of the

available market capacity, particularly in high-risk areas.

• FAIR Plan Growth: California’s insurer of last resort has doubled its policy count to over 850,000 properties, with premiums averaging 30%

higher than traditional market rates and offering more limited coverage.

• Claims Impact: Wildfire-related losses have driven loss ratios above 150% in high-risk areas, with average claim costs increasing 40% due to

construction cost inflation and labor shortages.

• Consumer Costs: Average homeowner premiums have increased from $1,100 to $1,700+ in most areas, with high-risk zones seeing

premiums exceed $3,000-5,000 annually.

• Coverage Gaps: The time required to secure new coverage has increased from 3 days to 2+ weeks, affecting real estate transactions and

mortgage requirements across the state.

• Business Impact: Commercial property rates have increased 25-35%, with many businesses forced to piece together coverage through

multiple carriers or excess/surplus lines markets.

• Market Stability: Reinsurance costs have tripled since 2022, threatening carrier solvency and pushing more companies toward market

withdrawal or selective underwriting.

• Future Outlook: Without regulatory reform allowing

Host or Publisher Benjamin Johnston - LendUS, LLC.